File this under “you can’t make this up”.
RealtyTrac has developed a list of the “20 best markets to purchase single family rentals” based on cap rates and cashflows. According to the study, these markets offer great opportunities for “conservative” individual investors.
And let me tell you, RealtyTrac didn’t disappoint. The list contains some of the perennial favorites of conservative investors like Detroit (MI), Phoenix (AZ), Las Vegas (NV). Not to mention a half dozen markets in Florida and several rust belt cities like Dayton and Toledo (OH).
Most importantly, RealtyTrac managed to say all of that while at the same time, keeping a straight face.
Oh how quickly we forget. Next thing you know, we will be bringing back other “conservative” favorites like the 80/20 subprime mortgage, Triple A rated second mortgage backed securities and start using our homes as ATMs again.
Do me a favor and never forget to ask WHY. Cap rates are high in those markets? Why? Could it be that they have to be that high to even stand a chance that any investor would touch them with a 10 ft pole?
The more things change, the more they stay the same.